Which of the Following Statements Is Correct with Respect to §

question 113

Multiple Choice

Which of the following statements is correct with respect to § 1044 (rollover of publicly traded securities gain into specialized small business investment companies) ?

• A)Section 1044 provides for permanent exclusion of gain.
• B)To qualify under § 1044,the proceeds must be reinvested within one year of the sale.
• C)The amount realized must be reinvested in the common stock or partnership interest of a specialized small business investment company.
• D)Only b.and c.are correct.
• E)None of the above.

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Definitions:

Nonconstant Rate

Refers to a rate that changes over time, as opposed to a constant or fixed rate which remains the same.

Mixed Cost

Expenses that contain both fixed and variable components, changing in total with the level of activity but not proportionately.

Cost-Volume-Profit Analysis

An accounting method used to determine the effects on company profits of different levels of sales volume and costs.

Fixed Costs

Fixed expenditures that are unaffected by the amount of goods produced or sold, covering rent, salaries, and insurance.